Modification of the tax system under conditions of a state of war

Abstract

The article reveals the challenges of transforming the tax system during a state of war. The tax system is a crucial element of the country’s economy, as its efficiency directly impacts the volume of investments, entrepreneurial development, and the level of social security. Addressing these issues in this sphere is urgent, as it can slow down the nation’s progress and disrupt financial stability. Since the beginning of the war, the country has been actively working to find optimal means of supporting the tax system. Various transformations have been implemented to optimize and ensure the continuous functioning of the tax sector, including employing different policies and instruments to execute strategies. Reforms aimed at creating effective policies and tools for their implementation have already been introduced. However, the conditions of war are extremely dynamic, and changes in the economic structure are challenging to predict and control. This leads to challenges in achieving an optimal balance between maintaining the stability of the economic system, supporting domestic businesses, meeting the citizens’ needs, and providing the necessary financial resources for the military. The dynamics of military events and uncontrolled changes in the economy create complexities in achieving an optimal balance between system stability, support for domestic businesses, citizens’ needs, and the demands of the military. Considering the importance of the tax sector for the state’s financial sector, special attention is given to making changes to support and optimize this area during times of war. The tax system is a significant factor influencing the country’s economic development. Its effectiveness determines how well the country can promote entrepreneurship and provide social security for its citizens. An efficient tax system involves the redistribution of financial resources in the economy, ensuring the functioning of the payment system, and other critical processes. Consequently, measures aimed at improving the tax sphere become an integral part of broader efforts to develop and ensure the stability of Ukraine’s economy during wartime. In the context of optimizing the tax sector, significant changes have been implemented organizationally, some of which can be considered extraordinary. However, they have proven to be effective and rational components of strategic crisis management. The key regulators that contribute to changes in the tax policy structure are the fundamental principles of monetary and credit policies during the state of war and the Tax Code of Ukraine. Given the complex nature of Ukraine’s tax system, it has become crucial to summarize the results of already implemented measures. Such an analysis is necessary to determine optimal ways of optimization and improvement, particularly during a state of war when economic activities are subject to changes and risks. Summarizing the results of research conducted in the tax field allows for assessing the effectiveness of implemented reforms and developing scientifically justified recommendations to ensure the stable functioning of the system amid external challenges. The main goal of this analysis is to identify potential risks and problematic aspects that could reduce the efficiency of the tax system and lead to adverse consequences for the country’s economic stability. A scientifically grounded approach to summarizing research data enables the formulation of action plans to address issues and explore new opportunities. Only such an analysis will ensure the stable development of the country and its financial resilience in the face of unforeseen challenges.